REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 6592 OF 2021

Union of India …Appellant

Versus

Manraj Enterprises …Respondent

J U D G M E N T

M.R. SHAH, J.

1.Feeling aggrieved and dissatisfied with the impugned judgment

and order dated 12.04.2021 passed by the High Court of Delhi in

FAO(OS) No.52/2018, whereby the Division Bench of the High Court has

dismissed the said appeal of the appellant and has confirmed the order

passed by the learned Single Judge upholding the award of interest by

the sole arbitrator, the Union of India has preferred the present appeal.

2.That a contract was entered into between the appellant and the

respondent with regard to three work contracts. A dispute arose

between the parties and both the parties went into arbitration for the

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resolution of the dispute. The learned sole arbitrator vide award dated

17.01.2011 awarded an amount of Rs.78,81,553.08. The learned

arbitrator also awarded pendente lite and future interest at the rate of

12% and 18% respectively on the entire awarded amount except for the

earnest money deposit and security deposit.

2.1That the Union of India preferred an appeal under Section 34 of

the Arbitration & Conciliation Act, 1996 (hereinafter referred to as the

‘1996 Act’) challenging the award made on claim no.5 vide award dated

17.01.2011 pertaining to pre-suit, pendente lite and future interest

awarded on the balance due payment, from the due date of payment.

2.2The learned Single Judge of the High Court dismissed the said

appeal. The matter was carried further before the Division Bench by

way of FAO(OS) No. 52/2018 under Section 37 of the 1996 Act. By the

impugned judgment and order, the Division Bench of the High Court has

dismissed the said appeal and has confirmed the award made by the

learned arbitrator awarding pendente lite interest and future interest

awarded on the balance due payment. Hence, the present appeal.

3.Shri K.M. Nataraj, learned Additional Solicitor General appearing

on behalf of the appellant – Union of India has vehemently submitted

that as agreed between the parties and as per clause 16(2) of the

General Conditions of Contract (for short, ‘GCC’) governing the contract

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between the parties, there was a bar against payment of interest. It is

submitted that as agreed between the parties and as per clause 16(2),

no interest shall be payable upon the earnest money or the security

deposit or the amounts payable to the contractor under the contract.

3.1It is urged that even under Section 31(7)(a) of the 1996 Act, unless

otherwise agreed between the parties, the Arbitral Tribunal may include

in the sum for which the award is made interest, at such rate as it deems

reasonable, on the whole or any part of the money. It is submitted that if

there is an expression “agreed between the parties” governing the

contract that no interest shall be payable, parties are bound by such an

agreement and no interest either pendente lite or future interest on the

amount due and payable under the contract shall be awarded.

3.2It is contended that in the present case, clause 16(2) of the GCC

governing the contract between the parties specifically bars payment of

interest, not only on the earnest money or security deposit, but also upon

any amounts payable to the contractor under the contract. It is urged

that since the parties are governed by the contract and the arbitrator and

the arbitration proceedings are creatures of the contract, they cannot

traverse beyond what has been contemplated in the contract between

the parties.

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3.3It is further submitted that the power of the arbitrator to award

pendente lite interest considering pari materia clause to clause 16(2) of

the GCC has been examined by a three Judge Bench of this Court in the

case of Union of India v. Bright Power Projects (India) (P) Ltd., (2015) 9

SCC 695. It has been specifically observed and held in the said case

that in view of the specific contract between the parties and the bar for

awarding the interest, the payment of interest was not permissible even

on earnest money deposit or security deposit or amounts payable to

the contractor under the contract. It is submitted that the expression

“amounts payable to the contractor under the contract” is wide enough to

cover every payment of amount payable under the contract.

3.4It is submitted that the expression “money due under the contract”

has been dealt with and considered by this Court in the case of Garg

Builders v. Bharat Heavy Electricals Limited, 2021 SCC OnLine SC 855

= 2021 (11) SCALE 693. It is observed and held that if the contract

prohibits pre-reference and pendente lite interest, the arbitrator cannot

award interest for the said period. It is contended that in the aforesaid

case, the expression used was “any moneys due to the contractor” by

the employer which includes the amount awarded by the arbitrator.

Therefore, where the contract contains a specific clause which expressly

4

bars payment of interest, then it is not open for the arbitrator to grant

pendente lite interest.

3.5It is further submitted by Shri Nataraj, learned ASG that the

expression “amounts payable to the contractor under the contract”

cannot be read with “earnest money deposit” or “security deposit” by

applying the principle of ejusdem generis. It is urged that the

expressions have been employed in clause 16(2) of the GCC

disjunctively by use of the word “or” and are intended to cover different

situations which may arise. It is submitted that the earnest money

deposit and security deposit are the amounts which are payable by the

contractor whereas the amount awarded by the arbitrator or any other

amounts payable under the contract could be under different

circumstances and could be payable by either party. It is submitted

therefore that the expression “amounts payable to the contractor under

the contract” has been employed to cover such other situations or

circumstances. It is therefore submitted that it is not possible to apply

the principle of ejusdem generis. Heavy reliance is placed on the

decision of this Court in the case of Jaiprakash Associates Ltd. v. Tehri

Hydro Development Corporation (India) Ltd., (2019) 17 SCC 786

(paragraphs 22 & 23). It is contended that in the aforesaid decision also,

while discussing the power of the arbitrator to grant pendente lite

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interest, it has been held that if the agreement between the parties

specifically prohibits grant of interest, the arbitrator cannot award

pendente lite interest in such cases.

3.6Making the above submissions and relying upon the aforesaid

decision, it is prayed to allow the present appeal and quash and set

aside the judgments and orders passed by the High Court as well as the

award passed by the learned arbitrator awarding the interest, pendente

lite and future interest.

4.The present appeal is vehemently opposed by Shri Vikas Singh,

learned Senior Advocate appearing on behalf of the respondent. It is

submitted that if the entire clause 16 of GCC is read, it is evident that it

pertains specifically to earnest money and security deposits and the

same can in no way be read in a manner to imply a bar on pendente lite

interest or other amounts as contended on behalf of the Union of India.

4.1It is submitted that none of the judgments cited by the learned ASG

has taken into account the fact that the law laid down by various judicial

pronouncements under the Arbitration Act, 1940 has been codified

statutorily under Section 31(7)(a) of the 1996 Act.

4.2It is submitted that a five Judge Bench of this Court in the case of

Secretary, Irrigation Department, State of Orissa v. G.C. Roy, (1992) 1

SCC 508 had an occasion to consider the question of power of the

6

arbitrator to award interest pendente lite and it has been held that when

the agreement between the parties does not prohibit grant of interest and

where the party claims interest and the dispute has been referred to an

arbitrator, then the arbitrator does have the power to award interest

pendente lite.

4.3It is submitted that even in the case of Raveechee and Company v.

Union of India, (2018) 7 SCC 664, it has been held that the power to

grant interest pendente lite is inherent in an arbitrator who also exercises

the power to do equity and unless the agreement expressly bars the

arbitrator from awarding interest pendente lite, the arbitrator has all the

powers to grant pendente lite interest. It is urged that in the present

case, clause 16 does not bar an arbitrator to award interest pendente

lite. It is submitted that the arbitrator is never a party to the agreement

and therefore it does not bar the arbitrator from awarding pendente lite

interest. It is contended that the bar is on the parties from claiming

interest on security deposits and earnest money and not on the arbitrator

from awarding interest pendente lite on other amounts. In support of the

same, reliance is placed on the decision of this Court in the case of

Kailash v. Nanhku, (2005) 4 SCC 480, wherein this Court while dealing

with Order VIII Rule 1 CPC, has held that the bar is on a party before the

Court and not on the court’s inherent powers. It is submitted that even

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on a fair reading of Section 31(7)(a) of the 1996 Act, it is clear that the

bar to claim interest is on the parties and not the arbitrator specifically.

4.4It is contended that in the present case, the High Court has

correctly placed reliance on Union of India v. M/s Pradeep Vinod

Construction Co., Civil Appeal No. 2099 of 2007 decided on 03.08.2017

and has rightly distinguished the judgments relied upon by the appellant

as the said judgments did not contain any discussion on clause 16(2) of

the GCC. It is submitted that this Court in the case of M/s Pradeep

Vinod Construction Co. (supra) has considered clause 16(2) of the GCC

and after having considered the judgments relied upon by the appellant,

namely, Bright Power Projects (India) P. Ltd. (supra) and other judgments

relied upon, has held that no interest is awardable on earnest money and

security deposit. It is submitted therefore that unless there is an express

and specific bar against the arbitrator to award the pendente lite interest,

the arbitrator is not precluded from awarding the interest on the amounts

awarded.

4.5It is urged that the decision of this Court in the case of Tehri Hydro

Development Corporation Ltd. (supra), relied upon on behalf of the

appellant, is not applicable to the facts of the case on hand as the

clauses in the said case were materially different from clause 16(2). It is

submitted that clauses 50 & 51 contained an express bar on payment of

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interest on money due to the contractor and payment of interest on

money due to dispute.

4.6It is further submitted that as such before the High Court, learned

counsel appeared on behalf of the appellant conceded to the fact that the

issue raised in the present appeal is covered by the judgment of this

Court in the case of M/s Pradeep Vinod Construction Co. (supra) and

therefore once it has been conceded, thereafter it is not open for the

Union of India to raise the same issue after having made a clear

concession.

4.7It is submitted that in the present case, even the appellant too had

claimed interest at the rate of 18% from the respondent by way of

counter-claim and the same has been recorded in the Arbitral Tribunal’s

award dated 17.01.2011. It is submitted that the appellant cannot now

be permitted to say that no interest pendente lite is liable to be awarded

by the learned arbitrator.

4.8Making the above submissions and relying upon the aforesaid

decisions, it is prayed to dismiss the present appeal.

5.In rejoinder, it is submitted by Shri Nataraj, learned ASG that

decision of this Court in the case of M/s Pradeep Vinod Construction Co.

(supra) does not lay down any law/legal precedent. It is urged that in

any case, the same has been rendered prior to the three Judges Bench

9

decision in the case of Jaiprakash Associates Ltd. v. Tehri Hydro

Development Corporation (India) Ltd. (supra).

6.We have heard learned counsel for the respective parties at length

and pondered over the issues raised before us.

6.1The short question which is posed for the consideration of this

Court is in view of the specific clause 16(2) of the GCC, whether the

contractor is entitled to any interest pendente lite on the amounts

payable to the contractor other than upon the earnest money or the

security deposit.

6.2Clause 16 of the GCC reads as under:

“16: Earnest Money and Security Deposit- (1) The earnest money

deposited by the Contractor with his tender will be retained by the Railway

as part of security for the due and faithful fulfilment of the contract by the

contractor. The balance to make up this security deposit which will be 10

per cent of the total value of the contract, unless otherwise specified in the

special conditions, if any, may be deposited by the Contractor in case or in

the form

of Government Securities or may be recovered by percentage deduction

from the Contractor’s “on account” bills provided also that in case of a

defaulting contractor the Railway may retain any amount due for payment

to the contractor on spending ‘on account bills’, so that the amount or

amounts so retained may not exceed 10% of the total value of the

contract.

(2) No interest will be payable upon the earnest money or the security

deposit or amounts payable to the Contractor under the Contract, but

Government Securities deposited in terms of Sub-clause (1) of this Clause

will be repayable with interest accrued thereon.”

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Thus, as such, as per clause 16(2) no interest would be payable

upon the earnest money or the security deposit or amounts payable to

the contractor under the contract.

6.3The scope of the expression “money due under the contract” has

been considered by this Court in the case of State of Karnataka v. Shree

Rameshwara Rice Mills, (1987) 2 SCC 160. In paragraph 9, it is

observed and held as under:

“9. ……..What the Full Bench has failed to notice is that even though

the damages become payable on account of breach of conditions of the

contract, the liability to pay damages does not fall outside the terms of the

contract but within the terms of the contract. The words “any amount that

may become due or payable by the first party to the second party under

any part of this agreement” have to be read in conjunction with the earlier

portion of the clause stipulating liability on the party contracting with the

State to pay damages for breach of conditions. Therefore, it follows that

though damages become payable on account of breach of conditions of

the agreement they nevertheless constitute amounts payable under the

contract i.e. under one of the terms of the contract imposing liability to pay

damages for breach of conditions. To illustrate the position if the

agreement provides for a liquidated sum being paid as damages for

breach of conditions instead of a sum to be assessed by the Deputy

Commissioner, it cannot be said that the specified damages will not be

money due under the contract and hence the damages cannot be

recovered under the Revenue Recovery Act. What applies to specified

damages will likewise apply to damages which are quantified after

assessment…..”

Therefore, it is held that though damages become payable on

account of breach of conditions of the agreement they nevertheless

constitute amounts payable under the contract.

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7.An identical question came up for consideration before this Court in

the recent decision of this Court in the case of Garg Builders (supra). In

the said case, this Court considered clause 17, which reads as under:

“Clause 17 : No interest shall be payable by BHEL on Earnest Money

Deposit, Security Deposit or on any moneys due to the contractor.”

[Bold letters are ours]

After considering various decisions on award of interest pendente

lite and the future interest by the arbitrator and after discussing the

decisions of this Court in the cases of Ambica Construction v. Union of

India, (2017) 14 SCC 323 and Raveechee and Company (supra) and

other decisions on the point, this Court has observed in paragraphs 9 to

18 as under:

“9. On the other hand, Mr. Pallav Kumar, learned counsel for the

respondent, submitted that Section 31(7)(a) of the 1996 Act gives

paramount importance to the contract entered into between the parties

and categorically restricts the power of an arbitrator to award pre-

reference and pendente lite interest when the parties themselves have

agreed to the contrary. He argued that if the contract itself contains a

specific clause which expressly bars the payment of interest, then it is not

open for the arbitrator to grant pendente lite interest. It was further argued

that Ambica Construction (supra) is not applicable to the instant case

because it was decided under the Arbitration Act, 1940 whereas the

instant case falls under the 1996 Act. It was further argued that Section 3

of the Interest Act confers power on the Court to allow interest in the

proceedings for recovery of any debt or damages or in proceedings in

which a claim for interest in respect of any debt or damages already paid.

However, Section 3(3) of the Interest Act carves out an exception and

recognizes the right of the parties to contract out of the payment of interest

arising out of any debt or damages and sanctifies contracts which bars the

payment of interest arising out of debt or damages. Therefore, Clause 17

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of the Contract is not violative of any the provisions of the Indian Contract

Act, 1872. In light of the arguments advanced, the learned counsel prays

for dismissal of the appeal.

10. We have carefully considered the submissions of the learned

counsel for both the parties made at the Bar. The law relating to award

of pendente lite interest by Arbitrator under the 1996 Act is no longer res

integra. The provisions of the 1996 Act give paramount importance to the

contract entered into between the parties and categorically restricts the

power of an arbitrator to award pre-reference and pendente lite interest

when the parties themselves have agreed to the contrary. Section 31(7)(a)

of the 1996 Act which deals with the payment of interest is as under:

“31(7)(a) Unless otherwise agreed by the parties, where and insofar as

an arbitral award is for the payment of money, the arbitral tribunal may

include in the sum for which the award is made interest, at such rate as it

deems reasonable, on the whole or any part of the money, for the whole or

any part of the period between the date on which the cause of action

arose and the date on which the award is made.”

11. It is clear from the above provision that if the contract prohibits pre-

reference and pendente lite interest, the arbitrator cannot award interest

for the said period. In the present case, clause barring interest is very

clear and categorical. It uses the expression “any moneys due to the

contractor” by the employer which includes the amount awarded by the

arbitrator.

12. In Sayeed Ahmed and Company v. State of Uttar Pradesh, (2009)

12 SCC 26, this Court has held that a provision has been made under

Section 31(7)(a) of the 1996 Act in relation to the power of the arbitrator to

award interest. As per this section, if the contract bars payment of interest,

the arbitrator cannot award interest from the date of cause of action till the

date of award.

13. In Sree Kamatchi Amman Constructions v. Divisional Railway

Manager (Works), Palghat, (2010) 8 SCC 767, it was held by this Court

that where the parties had agreed that the interest shall not be payable,

the Arbitral Tribunal cannot award interest between the date on which the

cause of action arose to the date of the award.

14. Bharat Heavy Electricals Limited v. Globe Hi-Fabs Limited, (2015)

5 SCC 718, is an identical case where this Court has held as under:

13

“16. In the present case we noticed that the clause barring interest is

very widely worded. It uses the words “any amount due to the contractor

by the employer”. In our opinion, these words cannot be read as ejusdem

generis along with the earlier words “earnest money” or “security deposit”.”

15. In Sri Chittaranjan Maity v. Union of India, (2017) 9 SCC 611, it was

categorically held that if a contract prohibits award of interest for pre-

award period, the arbitrator cannot award interest for the said period.

16. Therefore, if the contract contains a specific clause which expressly

bars payment of interest, then it is not open for the arbitrator to

grant pendente lite interest. The judgment on which reliance was placed

by the learned counsel for the appellant in Ambica Construction (supra)

has no application to the instant case because Ambica Construction was

decided under the Arbitration Act 1940 whereas the instant case falls

under the 1996 Act. This has been clarified in Sri Chittaranjan

Maity (supra) as under:

“16. Relying on a decision of this Court in Ambica

Construction v. Union of India, (2017) 14 SCC 323, the learned Senior

Counsel for the appellant submits that mere bar to award interest on the

amounts payable under the contract would not be sufficient to deny

payment on pendente lite interest. Therefore, the arbitrator was justified in

awarding the pendente lite interest. However, it is not clear from Ambica

Construction (supra) as to whether it was decided under the Arbitration

Act, 1940 (for short “the 1940 Act”) or under the 1996 Act. It has relied on

a judgment of Constitution Bench in State of Orissa v. G.C. Roy, (1992) 1

SCC 508. This judgment was with reference to the 1940 Act. In the 1940

Act, there was no provision which prohibited the arbitrator from awarding

interest for the pre-reference, pendente lite or post-award period, whereas

the 1996 Act contains a specific provision which says that if the agreement

prohibits award of interest for the pre-award period, the arbitrator cannot

award interest for the said period. Therefore, the decision in Ambica

Construction (supra) cannot be made applicable to the instant case.”

17. The decision in Raveechee and Company (supra) relied on by the

learned counsel for the appellant is again under the Arbitration Act 1940

which has no application to the facts of the present case.

18. Having regard to the above, we are of the view that the High Court

was justified in rejecting the claim of the appellant seeking pendente

lite interest on the award amount.”

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In the case of Garg Builders(supra), this Court observed and held

that the decisions of this Court in the cases of Ambica Construction

(supra) and Raveechee and Company (supra), relied upon by the

learned senior counsel appearing on behalf of the respondent herein,

shall have no application as the same were under the Arbitration Act,

1940. It is not in dispute that in the present case, the parties are

governed by the 1996 Act.

8.In the case of Bright Power Projects (India) (P) Ltd. (supra), while

considering pari materia clause with clause 16(2) of the GCC, a three

Judge Bench of this Court has held that when the parties to the contract

agree to the fact that interest would not be awarded on the amount

payable to the contractor under the contract, they are bound by their

understanding and having once agreed that the contractor would not

claim any interest on the amount to be paid under the contract, he could

not have claimed interest either before a civil court or before an Arbitral

Tribunal. In the aforesaid case, this Court considered clause 13(3) of the

contract, which reads as under:

“13.3 – No interest will be payable upon the earnest money and the

security deposit or amounts payable to the contractor under the contract,

but government securities deposited in terms of sub-clause (1) of this

clause will be repayable with interest accrued thereon.”

8.1.In the said decision, this Court also considered Section 31(7)(a) of

the 1996 Act. It is specifically observed and held that Section 31(7) of

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the 1996 Act, by using the words “unless otherwise agreed by the

parties” categorically specifies that the arbitrator is bound by the terms of

the contract insofar as award of interest from the date of cause of action

to date of the award is concerned. It is further observed and held that

where the parties had agreed that no interest shall be payable, the

Arbitral Tribunal cannot award interest. Thus, the aforesaid decision of a

three Judge Bench of this Court is the answer to the submission made

on behalf of the respondent that despite the bar under clause 16(2)

which is applicable to the parties, the Arbitral Tribunal is not bound by the

same. Therefore, the contention raised on behalf of the respondent that

de hors the bar under clause 16(2), the Arbitral Tribunal independently

and on equitable ground and/or to do justice can award interest

pendente lite or future interest has no substance and cannot be

accepted. Once the contractor agrees that he shall not be entitled to

interest on the amounts payable under the contract, including the interest

upon the earnest money and the security deposit as mentioned in clause

16(2) of the agreement/contract between the parties herein, the arbitrator

in the arbitration proceedings being the creature of the contract has no

power to award interest, contrary to the terms of the agreement/contract

between the parties and contrary to clause 16(2) of the

agreement/contract in question in this case.

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10.The further submission made on behalf of the respondent is that

clause 16 has to be read as a whole and on doing so, it can be said that

clause 16 pertains specifically to earnest money and security deposit and

that the same can in no way be read in a manner to imply a bar on

pendente lite interest. It is required to be noted that clause 16(1) is with

respect to earnest money/security deposit. However, clause 16(2) is

specifically with respect to interest payable upon the earnest money or

the security deposit or amounts payable to the contractor under the

contract. The words used in clause 16(2) is “or”. Therefore, the

expression “amounts payable to the contractor under the contract”

cannot be read in conjunction with “earnest money deposit” or “security

deposit” by applying the principle of ejusdem generis. The expression

“amounts payable to the contractor under the contract” has to be

read independently and disjunctively to earnest money deposit and

security deposit as the word used is “or” and not “and” between “earnest

money deposit”, “security deposit” and “amounts payable to the

contractor under the contract”. Therefore, the principle of ejusdem

generis is not applicable in the present case. On the principle of

ejusdem generis, this Court in the case of Tehri Hydro Development

Corporation (India) Ltd. (supra), in paragraphs 22 and 23, has observed

and held as under:

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“22. Insofar as argument based on the principle of ejusdem generis is

concerned, the Division Bench has held that that is not applicable in the

present case. We find that it is rightly so held. Ejusdem generis is the rule

of construction. The High Court has negated this argument in the following

manner: [Jaiprakash Associates Ld. V. Tehri Hydro Development Corpn.

(India) Ltd., 2012 SCC OnLine Del 6213]

“18. The rule of ejusdem generis guides us that where two or more words

or phrases which are susceptible of analogous meaning are coupled

together, a noscitur a sociis, they are to be understood to mean in their

cognate sense and take colour from each other but only if there is a

distinct genus or a category. Where this is lacking i.e., unless there is a

category, the rule cannot apply.”

As rightly held, the rule of ejusdem generis would be applied only if there

is distinct genus or a category, which is lacking in the instant case. This

rule is applicable when particular words pertaining to a clause, category or

genus are followed by general words. In such a situation, the general

words are construed as limited to things of same kind as those specified.

In that sense, this rule reflects an attempt “to reconcile incompatibility

between the specific and general words in view of the other rules of

interpretation that all words in a statute are given effect, if possible, that a

statute is to be construed as a whole and that no words in a statute were

presumed to be superfluous”. [See Lokmat Newspapers (P)

Ltd. v. Shankarprasad [Lokmat Newspapers (P) Ltd. v. Shankarprasad,

(1999) 6 SCC 275].

23. In fact, construing the similar clause, this Court in BHEL v. Globe Hi-

Fabs Ltd., (2015) 5 SCC 718 has held that rule of ejusdem generis, is No.

applicable inasmuch as : (BHEL case [BHEL v. Globe Hi-Fabs Ltd., (2015)

5 SCC 718 : (2015) 3 SCC (Civ) 287] , SCC pp. 722-23, paras 12 & 15-16)

“12. The rule of ejusdem generis has to be applied with care and caution.

It is not an inviolable rule of law, but it is only permissible inference in the

absence of an indication to the contrary, and where context and the object

and mischief of the enactment do not require restricted meaning to be

attached to words of general import, it becomes the duty of the courts to

give those words their plain and ordinary meaning. As stated

[Quazi v. Quazi, 1980 AC 744 : (1979) 3 WLR 833 HL] by Lord Scarman:

‘If the legislative purpose of a statute is such that a statutory series should

be read ejusdem generis, so be it, the rule is helpful. But, if it is not, the

rule is more likely to defeat than to fulfil the purpose of the statute. The

rule like many other rules of statutory interpretation, is a useful servant but

a bad master.’

So a narrow construction on the basis of ejusdem generis rule may have

to give way to a broader construction to give effect to the intention of

Parliament by adopting a purposive construction.

15. A word of caution is here necessary. The fact that the ejusdem

generis rule is not applicable does not necessarily mean that the prima

facie wide meaning of the word “other” or similar general words cannot be

18

restricted if the language or the context and the policy of the Act demand a

restricted construction. In the expression “defect of jurisdiction or other

cause of a like nature” as they occur in Section 14(1) of the Limitation Act

the generality of the words “other cause” is cut down expressly by the

words “of a like nature”, though the rule of ejusdem generis is strictly not

applicable as mention of a single species “defect of jurisdiction” does not

constitute a genus. Another example that may here be mentioned is

Section 129 of the Motor Vehicles Act which empowers any “police officer

authorised in this behalf or other person authorised in this behalf by the

State Government” to detain and seize vehicles used without certification

of registration or permit. The words “other person” in this section cannot be

construed by the rule of ejusdem generis for mention of single species,

namely, “police officer” does not constitute a genus but having regard to

the importance of the power to detain and seize vehicles it is proper to

infer that the words “other person” were restricted to the category of

government officers. In the same category falls the case interpreting the

words “before filing a written statement or taking any other steps in the

proceedings” as they occur in Section 34 of the Arbitration Act, 1940. In

the context in which the expression “any other steps” finds place it has

been rightly construed to mean a step clearly and unambiguously

manifesting an intention to waive the benefit of arbitration agreement,

although the rule of ejusdem generis, has No. application for mention of a

single species viz. written statement does not constitute a genus.

16. In the present case we noticed that the clause barring interest is very

widely worded. It uses the words “any amount due to the contractor by the

employer”. In our opinion, these words cannot be read as ejusdem

generis along with the earlier words “earnest money” or “security deposit”.”

11.Further, heavy reliance is placed on the decision of this Court

in the case of M/s Pradeep Vinod Construction Co. (supra) by the

learned counsel appearing on behalf of the respondent. The same

shall not be applicable for the reason that the said decision is by a

two Judge Bench and the contrary view taken by this Court in the

case of Bright Power Projects (India) (P) Ltd. (supra) is by a three

Judge Bench. Also, in the case of M/s Pradeep Vinod Construction

Co. (supra), this Court has not considered the binding decision of

this Court in the case of Bright Power Projects (India) (P) Ltd.

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(supra), which is by a Bench of three Judges. Even otherwise, the

same is prior to the decision of this Court in the case of Tehri Hydro

Development Corporation (India) Ltd. (supra), and the said

subsequent decision of this Court is also a three Judge Bench

decision. Moreover, in the case of M/s Pradeep Vinod Construction

Co. (supra), though in clause 16(2), the expression used is “or

amounts payable to the contractor under the contract”, this Court

has only considered the non-award of interest on earnest money

and security deposit. In any case, in view of the subsequent

decisions of this Court, referred to hereinabove and in view of clause

16(2) of the GCC, the arbitrator could not have awarded the interest,

pendente lite or future interest on the amount due and payable to

the contractor under the contract in the instant case.

12.The last submission made on behalf of the respondent is that

as the learned counsel appearing on behalf of the appellant herein,

before the High Court, conceded that the issue raised in the petition

is covered by the judgment of this Court in M/s Pradeep Vinod

Construction Co. (supra) and that even the appellant has claimed

interest @ 18% against the respondent-contractor, therefore it is not

open for the appellant to re-agitate the issue before this Court is

concerned, it is required to be noted that the concession if any by

the counsel which is contrary to the law laid down by this Court shall

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not be binding on the parties. Further, merely because the appellant

has claimed interest, does not imply that the contractor shall be

entitled to interest pendente lite. Even if the appellant would have

been awarded interest, the same also was not permissible and could

have been a subject matter of challenge. In short, there cannot be

an estoppel against law.

13.In view of the aforesaid discussion and for the reasons stated

above, we hold that the learned Arbitrator in the instant case has

erred in awarding pendente lite and future interest on the amount

due and payable to the contractor under the contract in question and

the same has been erroneously confirmed by the High Court.

14.Accordingly, the present appeal succeeds. The impugned

judgment and order passed by the Division Bench of the High Court

in an appeal under Section 37 of the 1996 Act and the order passed

by the learned Single Judge in an application under Section 34 of

the 1996 Act and the award passed by the learned Arbitral Tribunal

awarding pendente lite and future interest on the amounts held to be

due and payable to the contractor under the contract are hereby

quashed and set aside. It is held that in view of specific bar

contained in clause 16(2) of the GCC, the contractor shall not be

entitled to any interest pendente lite or future interest on the

amounts due and payable to it under the contract.

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15.The appeal is allowed accordingly. However, in the facts and

circumstances of the case, there shall be no order as to costs.

……………………………J.

[M.R. SHAH]

NEW DELHI; …………………………….J.

NOVEMBER 18, 2021. [B.V. NAGARATHNA]

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